In lupus-prone strains of mice, bone marrow derived pluripotent stem cells and/or their immediate progeny demonstrate excessive proliferation. They have increased numbers of both endogenous and exogenous stem cell derived colonies. In vitro studies with NZB marrow demonstrate an excess of stem cell derived B cell production of IgM and anti-DNA relative to other strains. The results were confirmed and extended using sorter purified stem cells. In addition, such sorter purified stem cells transfer eh NZB phenotype to normal mice. These studies suggest a fundamental abnormality in stem cell activity. Retrovirus studies demonstrate excess Mpmv RNA in thymuses of lupus- prone mice. The abnormality is transferrable with bone marrow stem cells. The basis for this abnormal expression has been studied. First, a genomic library from NZB mice was probed with Mpmv specific probes and a full-length clone isolated. The LTR was sequenced, demonstrating a mutation in a negative regulatory region. Gel retardation studies confirm that the mutation alters binding of a regulatory DNA binding protein.